Question
Consider a graph on which one good Y is on the vertical axis and the only other good X is on the horizontal axis. On
Consider a graph on which one good Y is on the vertical axis and the only other good X is on the horizontal axis. On this graph the income-consumption curve has a negative slope for low incomes, then it takes a zero slope for a higher income, and then it takes a positive slope for even higher incomes (the curve looks like a U-shape, first falling and then rising as income increases). This curve illustrates that:
A) At low income level X is an inferior good, and at high income level Y is a normal good.
B) At low income level Y is a normal good, and at high income level X is an inferior good.
C) At low income level Y is an inferior good, and at high income level both are normal good.
D) At low income level both are inferior good, and at high income level both are normal good.
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